Kaiser has a home loan program that defers and forgives interest after 10 years, but do I have to pay taxes on the deferred interest?

[mihhwang]

I am planning on using the Kaiser home loan program where they let me borrow 10% of my home purchase price up to $200000, and the interest is deferred and then forgiven after 10 years, but it says:

TAX REPORTING 

? TPMG will report imputed income annually to the Internal Revenue Service (IRS) on the physician’s IRS Form W-2 in an amount equal to the interest deferred during the year. 

? TPMG will report secured loan interest paid and/or imputed on IRS Form 1098. The physician should consult a tax advisor to determine eligibility for a mortgage interest deduction. See IRS Publication 936. 

? Physicians required to pay deferred interest should consult a tax advisor to determine eligibility for a miscellaneous itemized deduction.   

Does that mean the interest that is deferred will be calculated as income? I've included the full brochure as a pdf, if needed.

[TomYoung]

As I read this, yes the interest will be considered taxable income as it's on your W-2.  You'll be able to list the interest as mortgage interest on Schedule A.  Whether you get any actual tax benefit from this itemized deduction will depend on your personal circumstances since the standard deduction now is so much larger than it was in 2017 and before.

[Anonymous]

talk to human resources to explain the program if you don't understand the brochure.